Opinion
W.C. No. 4-293-203
January 8, 2001
FINAL ORDER
The claimant seeks review of an order of Administrative Law Judge Felter (ALJ) which imposed penalties under § 8-43-401(2)(a), C.R.S. 2000, for the respondents' failure to pay medical benefits. The claimant contends the ALJ erred in refusing to impose penalties under § 8-43-304(1), C.R.S. 2000. We disagree, and therefore, affirm.
Section 8-43-304(1), authorizes an ALJ to assess penalties up to $500 per day for each day the insurer violates any provision of the Workers' Compensation Act or:
"fails or refuses to perform any duty lawfully enjoined within the time prescribed by the director for which no penalty has been specifically provided, or fails, neglects, or refuses to obey any lawful order made by the director or panel."
Section 8-43-401(2)(a) creates a specific penalty for the failure timely to pay medical or permanent partial disability benefits. In pertinent part, the statute states that if:
"any insurer or self-insured employer willfully delays payment of medical benefits for more than thirty days or willfully stops payments such insurer or self-insured employer shall pay a penalty to the division of eight percent of the amount of such wrongfully withheld benefits ."
On March 25, 1996, the claimant suffered admitted injuries. In a final order dated November 22, 1999, the ALJ ordered the respondents to pay for thoracic and orthopedic surgery recommended by the treating physicians, and psychiatric treatment recommended by Dr. Price.
The ALJ found the respondents willfully failed to comply with the November 22 order for the payment of the medical and psychiatric expenses. Expressly relying on Holliday v. Industrial Claim Appeals Office, 997 P.2d 1212 (Colo.App. 1999), cert. granted May 15, 2000, 99SC742, the ALJ further determined that the specific penalty provisions of § 8-43-401(2)(a) superseded the general penalty provisions of § 8-43-304(1). Therefore, the ALJ ordered the respondents to pay a penalty equal to 8 percent of the unpaid medical expenses and denied the claimant's request for the imposition of penalties under § 8-43-304(1).
On appeal, the claimant concedes that § 8-43-401(2)(a) creates a specific penalty for the failure to pay medical benefits. However, the claimant argues the ALJ erroneously determined that § 8-43-401(2)(a) is the exclusive remedy for the respondents' failure to pay medical benefits. The claimant argues that where, as here, the challenged conduct involves the respondents failure to comply with a lawful order, it is within the ALJ's discretionary authority to impose penalties under either § 8-43-401(2)(a) or § 8-43-304(1). We reject the claimant's argument.
The ALJ correctly recognized the courts have held that the specific penalty provisions of § 8-43-401(2)(a) supersede the general penalty provisions of § 8-43-304(1), where the disputed conduct relates to the payment of medical benefits. Holliday v. Industrial Claim Appeals Office, supra; Sears v. Penrose Hospital, 942 P.2d 1345 (Colo.App. 1997). The rationale for these decisions is that § 8-43-401(2)(a) creates a specific penalty for willfully failing to pay medical benefits, and § 8-43-304(1) applies only where no other penalty "has been specifically provided" in the Workers' Compensation Act. In so doing, the court rejected the notion that the General Assembly intended to create two penalties for the late payment of medical expenses.
Expressly relying upon Sears v. Penrose Hospital, supra, we rejected a similar argument in Ahlstrom v. Colorado Compensation Insurance Authority, W.C. Nos. 3-815-100 et al., (April 15, 1997). In Ahlstrom, the claimant argued that Sears is not determinative where penalties are sought for the failure to comply with a lawful order. See also, Winters v. Cowen Transfer Storage, W.C. No. 4-153-716 (July 24, 1997). However, we noted that Sears itself involved the insurer's failure to pay medical benefits following the entry of an order requiring the payment of medical benefits. Nevertheless, the Sears court reasoned that the gravamen of the disputed conduct was still the failure to pay medical benefits. Consequently, Sears reflects the court's conclusion that § 8-43-401(2)(a) governs a claim for penalties based on the failure to pay medical benefits even if the failure also constitutes a violation of a final order. Therefore, we concluded in Ahlstrom that § 8-43-402(2)(a) was the exclusive remedy for the respondents' failure to pay medical benefits. We adhere to our prior conclusions.
Furthermore, the issue in Holliday concerned whether or not the respondents were subject to penalties under § 8-43-304 where they failed to pre-authorize medical treatment in accordance with an order of a prehearing administrative law judge. Although § 8-43-304(1) permits the imposition of penalties for failure to obey lawful orders, the court held that the statute did not govern the claim for penalties because the gravamen of the respondents' conduct was the failure to pay for medical treatment. We are mindful that Holliday is pending certiorari review on the question of whether the court of appeals erred in holding that violation of an order concerning the payment of medical benefits can only be penalized under § 8-43-401(2) (emphasis in original)]. However, we are bound by published decisions of the Court of Appeals. C.A.R. 35(f). Therefore, unless and until Holliday is modified or reversed, we are compelled to conclude the ALJ correctly refused to impose penalties under § 8-43-304(1), where, as here the gravamen of the challenged conduct is the failure to pay medical benefits.
The claimant's further arguments have been considered and are unpersuasive. The claimant's arguments notwithstanding, Mountain City Meat Co. v. Oqueda, 919 P.2d 246 (Colo 1996), does not stand for the proposition that the Workers' Compensation Act is to be construed "liberally in favor of the claimant to help them recover." Rather, the Oqueda noted that the Act is "remedial and beneficent in purposes, and should be liberally construed to accomplish its humanitarian purpose of assisting injured workers and their families." Id at 252. However, penalty statutes are to be narrowly and strictly construed against party seeking penalties. Calkins v. Albi, 163 Colo. 370, 431 P.2d 17 (1967) ; Support, Inc., v. Industrial Claim Appeals Office, 968 P.2d 174 (Colo.App. 1998). Therefore, we reject the claimant's contention that Oqueda required the ALJ to assess penalties under § 8-43-304(1) because it would result in a greater recovery for the claimant than § 8-43-402(2)(a).
IT IS THEREFORE ORDERED that the ALJ's order dated August 29, 2000, is affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ David Cain
____________________________________ Kathy E. Dean
NOTICE
This Order is final unless an action to modify or vacate this Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, CO 80203, by filing a petition for review with the Court, within twenty (20) days after the date this Order is mailed, pursuant to § 8-43-301(10) and § 8-43-307, C.R.S. 2000. The appealing party must serve a copy of the petition upon all other parties, including the Industrial Claim Appeals Office, which may be served by mail at 1515 Arapahoe, Tower 3, Suite 350, Denver, CO 80202.
Copies of this decision were mailed January 8, 2001 to the following parties:
Linda Giddings, P. O. Box 748, Mossyrock, WA 98564
Northern Telecom, 200 Athens Way, Nashville, TN 37228-1308
Darlene Hinson, Northern Telecom, 2221 Lakeside Blvd., Richardson, TX 75082
Frank Bolssoneau, Liberty Mutual Insurance Company, P. O. Box 3539, Englewood, CO 80155
Mary Anders, Liberty Mutual Insurance Company, P. O. Box 168208, Irving, TX 75016
Jack Kintzele, Esq., 1317 Delaware St., Denver, CO 80204 (For Claimant)
David G. Kroll, Esq., 1120 Lincoln St., #1606, Denver, CO 80203 (For Respondents)
BY: A. Pendroy